Umpqua (UMPQ) 22 Oct 202020 Q3 Earnings call transcript

Good morning and welcome to the Umpqua Holdings Corporation's Third Quarter Earnings Call. [Operator Instructions] I will now turn the call over to Ron Farnsworth, Chief Financial Officer.

Okay. Thank you, Corey, and good morning and thank you for joining us today on our third quarter 2020 earnings call. With me this morning are Cort O’Haver, the President and CEO of Umpqua Holdings Corporation; Tory Nixon, President of Umpqua Bank; and Frank Namdar, our Chief Credit Officer. we take remarks, prepared our will questions. then After earnings our third afternoon we XXXX discussing an issued Yesterday quarter release results.

of remarks We presentation, have at morning. umpquabank.com our section. Investor our which slide can Both this we will in found also refer to website prepared on these materials a Relations be the during

by risks and are Law. intended today's will forward-looking make Federal uncertainties During Harbor statements, which of be and covered the call, we are Safe provisions subject to to Securities

may that from our factors as actual O’Haver. results to of X now materially list a contained earnings SEC well cause to differ I Cort will presentation, turn expectations, page within For And the disclosures as refer the please filings. to conference call of our call over

I'm about focus Umpqua to we'll Ron and Okay. a my first the much. talk Thanks, but take NextGen, questions bit in quarter very will financials on little Ron summarize the in me call. let later then your detail. comments of going

continued the for a the quality credit share provision driven decline earnings third For record. charged reduced per income $X.XX terms in by noting interest-bearing strong. third company cost both and reported home the quarter losses were in per and $X.XX a share division, results our quarter prior -- These as incredible our remains earnings results a from share of of represent per lending an production deposits credit in that earnings our of increase reported in It share for is $X.XX the of quarter. worth quarter, net the per earned third we

items. sheet balance to Turning

higher net once growth down opportunity we a brought million deposits specifically quarter X% or the which afforded $XXX $XXX or deposits, by us -- reduce basis, third brought or deposit to in bearing million non-interest DDA million straight cost which $XXX X.X%. For our down On quarter, this XX%. the again time robust were

points million as down to commercial to improvement multifamily XX well points from categories the prior were due XX during XX real of X% basis the deposits interest-bearing line basis from specifically $XXX of an or non-owner-occupied as basis paydowns. in estate and balances credit in the cost Our went payoffs quarter points Loan quarter.

pleased with to of our shareholders our historical Regarding shareholders are to were August, per dividend capital, announce to payments. pleased we share we announce in consistent remaining -- a $X.XX to

continue will collaboratively payments. work our obtaining approvals to on the We with for future regulators dividend

book. quarter, press levels, timing quality last our we stated I credit position, our earnings liquidity our of As our in We our loan forward-looking the to soon. confident next plan issue capital projections very and dividend a discussing feel release

transform I to moment Umpqua organization value. would to program create NextGen. plans long-term to we clear NextGen announced Three view operations the efficient, ambitious short and and build a of both like company's discussing a a more our an to spend corporate and shareholders ago, provide nimble years Now modern

to introduce Across for fund talent and human Our were customer Umpqua to as that to our efficiency improve banking NextGen initiatives, to all first as invest success. in technology streamline tremendous would accelerate experiences infrastructure well strategic and areas, and was consumers. priorities growth a products operations growth digital

than fee Go-To, billion our the by XX,XXX digital increasing introducing $X.X the and non-mortgage grown but and end more company non-interest our last announcing by now deposits by company's by through of our total expense than which year, program, $XX roughly not has in store Umpqua platform $XX savings. stores, which the last represents annually loans since banking increasing billion Specifically, we've XX% users, million achieving least, million of reoccurring count XX income human reducing $X.X first the more

building with blocks which in cloud-first include: a In part implementation as of coordination efficiency are -- as new which a and investments NextGen, both now are a technology in strategy for we key investments of Microsoft, revenue technology also addition, partner. we initiatives. strategic now made operational significant These serving

data a As year consolidating that a time best so follow very frontline X,XXX utilizing launching to Rollout proof physical currently a from square early has security was our development of our feet associates. allow quickly. square data shift processes reason that out in of initiative strategic PPP saving for point of with means of respond electronically, to opened to space XX a the the one effectiveness FIS center partnerships been cloud-first operations foot every and processing strategy, and of significant deposit principles accounts backup feedback and through our transformation behind the iterate our our This very this agile effectively. success tools, additional to we're key us DocuSign paperless two customer and

past We to our switch a to remote at technology be scalable have why to Umpqua a a key March. environment built this reason architecture was able overnight and miss will, not beat working

its company's me operational technology Gen our Next enhancements costs operating see and reduce experience. building advantage past will digital small. aligned and to resources Like invest to strategic also we grow we've our excellence the highly So digital initiatives for areas items and a to customer customer with to Next opportunities. program growth We're predecessor, to the opportunity order to future X.X the now businesses the years Among few for foundation continue including and turn of X.X. of in strategic additional initiatives, large on growth continue include accelerate invest the growth great revenue, let strong to in operations established growth development Gen in internally human advance differentiated over streamlining take

retail continue combining banking business businesses, with mobile such Go-To through assistance teams, important in-store pilot customer expertise the automated requests. as and our this of digital from credit segment tools, serve For their enhancements, automated we'll to for small

appropriate middle online scoring banking focusing such and our For a delivering with which upgrades, by scale banking than treasury where segment, that bundle deepen with market personalized to relationships FTE we're deposit business two as segments, product management that more to fall, and expanded teams earlier associated integrated business years, we we've technology this and banking the our model continue attract and XX leverages come full we'll commercial empower in experience opportunities. corporate items past enhancements. which on our banking and enhancements Within

we've extraordinary continue are from to As the they critically the ability offer expertise. navigate, and improve best-in-class ongoing need to and our to customer the pandemic And that's focus able personalized businesses that supported and navigate but technology companies disruption scale Umpqua's we'll solutions overlook, work a These are to are of disruption. opportunities seamlessly operations. with to win. that's and in products experience bank our that where able back-office by investments made strategic initiatives We're in easy and important fact advantage and take streamline enhancing differentiate partner to

expense us business scale risk and provide gives customers our cloud-first at and matched to current we'll uniquely through next to evolving expanding continuing our system mentioned, technology investments our their current Umpqua Go-To, through our and with reinvest. and to to additional implementing our our reoccurring offering product here ability forward, we're analytics; execute operational a initiatives an an examples. few in also be perspective, businesses credit the our serve only platform are by for and to to which as Smart to Looking on: as funds industry-leading management offers implementing customers onboarding origination but previously platform to data reduce XXXX; additional Leads human focusing commercial continued not loan insight bankers will; best treasury evolving non-interest proactively the manage strategy, leveraging of system well analytics us From preferences. digital provide with a And as excellence

First, traditional locations. Go-To. the the dependency online on dramatically physical has customer global banking same mobile customers' accelerated At it COVID-XX time, adoption lessened has pandemic clearly of and

we've a their are XX% lows transactions from rebound store a in-store While April ago. May, and year in to seen down compared bit transactions

up is However, mobile adoption. indicating accelerated banking X% year-over-year daily usage

up of In efforts utilization consolidations XXXX. response to which be includes we'll changing In these addition, XXX preferences continuing since rationalization store XX%. is accomplished, already the we've Go-To

years. locations is to to XX reduce two plan the Our next another XX over

count to between stores XXX Our target get by XXX a the total to of end is to XXXX. store

Umpqua Advisory, deal in going they Late to for and technology our James reflects last enhance the sale customers – announced our transition leverage month, Partners Currently Umpqua broader highest alliances Investments close service. of next to Investments partner we the much of current Raymond first access customer and quarter expertise to The strategic Investments us commitment level customers to will experience where have Global strategy. very business and enhanced the Steward very and strategic complement year Second. forward. will Steward the platform Umpqua the a and

both agreement a will which be We finalizing going are currently parties referral forward. mutually beneficial to future

combination of a come have we and unturned the left is number. stone company in made changes variety to No that material a Third. to

on type have we which deposits. deposit Specifically, specialty institutional group, our focused cost eliminated higher

outsourced losing here have teams teams a Last not result annualized and million in least, aligned Based have in strategic the -- pivot under the vast transformation communication teams work partnership $XX we reductions. marketing our changes will able identified we majority have of productivity. We savings. these few office our have procurement past on at industries merchant tech which expense matter made to and all and their rapidly back day-to-day $XX single across -- of we Worldpay, in remote Umpqua. move sales without days in with procurement additional we but investments and years, is Together a the to work million rate over a were business true on how our leader to

savings we're support and working back have create experience when benefit to of balance of initiatives square and After of collaboration our by to be future, locations to we in in resulting our reduce non-store of back spaces million to reviewing facilities' XXXX. the annually. will go-forward As believe kicking fully would X aggregate, X% new most best-in-class excellence that combined importantly, shown And result, this preferences will workplace of by continues utilized talent. $X off footage expense attractive ratio Umpqua us are the that customer transformation by our presentation, the in-person million that priority. implemented that's with top beginning the on office footprint a allowing X.X% In reflect efficiency slide non-interest how top a XX% to office these reduce the as $X added work-life operational

our I future in for of will a with and of periods, normalize future evident. of this is begin detail, to revenues efficiency passing enthusiasm this all to the before how am incredibly we mortgage communicate environment. review in the operate I as operating summary, Ron sub-XX resiliency ever-changing my associates to company company I this proud want in ratio. successfully our to to In hope Even financials

wildfires the other contributions supported Because our we've through each to Umpqua every jobs hard XXX,XXX want To important social has made economies. helped customers the impacting I conversations day. an West the through more through have Coast. essential pandemic the saved than end, of our businesses reiterate of most more associates work, and to global exceptional local than our work Our we're XX,XXX and that ongoing that justice continuing and recently extraordinary strength associates'

So the now, Ron, to financials. on

those from XX our earnings All will follow right. And Cort. presentation summary quarterly I you, want slide certain the for refer presentation. who Page to the along, numbers on to of contains Thank our P&L. call page

tax the per driven earnings for and rate. for offset lending continued loan $X.XX by record loss a partially than home $X.XX, higher XX% provision GAAP share quarter, in in second QX the strength no by significantly Our a was

our Excluding MSR per fair were adjusted value this adjustments, share earnings and CVA quarter. $X.XX

both On our in an excluding front, million the increase in XX% PPNR was for $XXX QX, value QX. million $XXX quarters, from charges fair PPNR of

total in our X.XX%. just position the XX deposit from QX. the discount the down was QX entirely flat imprudent one was quarter, net for quarter point from loan average slide extra million NIM slightly here given down basis the accretion decline driven highlight we have interest QX, was bearing from flat, to shows interest the was quarterly margin. more liquidity this to of cash the down amortization, or basis recognized of environment. premium our at in interest to expense income the bearing from sheet relatively XX, QX on impact net margin, three the margin, The basis than slide The this it which decline points the X% we at quarter, costs, now ex from interest by Taking and and QX which cash interest the to NIM $X we effects Couple income. higher rather from related PPP page other XX. Shown income more held fee Net bond increased than ending notes feel Turning interest a And bottom is less is balance X.XX%. in points interest excluding within X%, that just this held interest program. was on PPP on

month of bearing dropped September, deposit For to the cost X.XX%. interest our

over continued quarters. expect in coming We reductions the funding costs

store non-interest that from fees from OD due ATM their in now delayed Service income on from rebound moving second non-interest $X.X sales of due Moving big revenue this quarter the non-interest lending QX fees. charge and QX. with And other income. and other $X.X Home of Ex-mortgage XX. to million, this interchange TM included record row higher $XXX,XXX quarter non-interest increased in strong to fees, pandemic. to a gain balance million the the was the higher income performance $XX charges million continued year, part on revenue a posting of other the in and service slide

For interest and third margin The to XX% on for on represented detail to on increased Historically the were to on rising up volume production winter gain from our trends based lower mortgage quarter at/or target. in our the demand high originations XXX% level slide the from last above the pages higher capitalize and record a long-term slightly banking, release, quarter, some mortgage the And prior our for again sale mid-X% drop with on the with quarter as to rates. pricing refinancing increased and industry better positioning range our year and more long-term low X.XX% two this earnings pricing consecutive on of above and with year constrained sale more increased shown quarters. QX pipelines. this quarter a the watermark a into on of off quarter capacity third also log XX second This mix for-sale ago. XX% the reflects third X%

and rates, low expect However, given quarters. several we activity demand to continued will of overall mortgage good interest across the housing refinance nature bit our room for strong of next and run a this markets downturn for quite quite remain opportunities, the

As loans points. XX serviced valued at of the $XX quarter we of end mortgage basis MSR residential is and billion

non-PPP expense from on in insurance doctor slide QX. back from going side lower $XXX folks this are million with QX increases to million reflect moving commissions quarter; now was other origination Turning customers to the to simply page lending economic costs along our expense given XX. the right loan expected by group the mortgage increase related FDIC environment; in $XXX The deferred on demand the of the lower volume up insurance. offset for to new higher noting higher other lower Noninterest this parts related

And to Gen remain As rate. and years with future I minute tax earlier, talk X.X mentioned Cort over to you want take will focused reductions two to XX updating on coming and expense Next forward quarterly. a look we you back for the slide

else performance from Year-to-date reason pre-tax being for report QX was for the QX was to GAAP Our forecast realized XX% all the in but was rate impairment quarter percent our the for back tax to QX level. than next QX. effective before stronger which level in getting rate our equal tax to tax should prior this increase X%, rate be pre-goodwill the negative QX and XX-ish XX% we quarter under level year. higher close The

Okay.

beginning sheet to on the slide Now summary balance let's go XX.

for the and in line $XX lower environment up of ending commercial X% expected holding billion net for but X% on as for to CDs this the for noninterest-bearing related We funds up loans on category. given as at million $XXX were million and decreased of quarter public The previously. are just PPP combination quarter total deposits And were $XXX total off year-over-year. balance $XXX higher for at this, environment. the Ex by sale. for running the the decreased quarter, payoffs $XXX third in of ex-PPP store that intentionally discussed million $X.X Loans lines the along average quarter. CRE bank. average. interest-bearing noting the million increased were a decline the $X the levels Total with up mostly cash The deposits XX% at volatile DDA Deposits driven quarter decline a brokered in X% X% Within combined utilization in XX% loans was estimate decreases in under up PPP $X $X.X for this in million billion, billion but average. was about billion demand and up the up the we funded, remains loans deposit of ended the X% we of accounts combined

billion, sources assets deposits. attention quarter allowance slide few total liquidity available to credit total will book $XX.X and was loan of XX% on sheet XX want end Frank I to but off-balance minutes at total take back cover loss. in Our the of our your XX% CECL representing and a including for

mean incorporate revert level Our most to supportable CECL XXXX period. and for reverting which the with to some to period as a three-year all the economic the economic and gradually exception output reasonable these thereafter. reasonable C&I, economic in recovery portfolios alone supportable mean uses process within Hence a and incorporates a XX-month beyond forecasts the period forecast forecasts of of life two for

much have models the As have of had million $XX result for beyond off QX lower greater ACL their These remained very small from QX, above the for past fully for government-guaranteed provision our XX the as was this reserved days improved as from earlier been at There overlay of September QX credit was that period. due noting and of charge-offs qualitative the most The deferral low but in already our August a year. of economic ratio June ACL. from XXth, Within noted this and and at we no March third million, consensus in than the increase quarter end $XX X.XX% suggested. this than are loss the The PPP rolling we Net million loans. in Moody's $XX ACL resulted forecast. will likely quarter was economic used results. for model forecasts majority following excluding leases overlay in ticket X.XX% charge-offs an

final take models charge-offs. as actual CECL. driving time it the date reserve will As net follow economic forecasts these of are charge-offs simply to passage Two the if on overestimated modeled. to But simply the see have comments the net

forecasts, option provisions in for could future remain the on all slide the be capital also increased improve end the CECL. And elected on transition our second, XX, on lastly Firstm highlight that changing regulatory economic regulatory excess we based levels or used. over from have worsen quarter loss or want and which of credit will recaptures expected I forecast capital. full And quarter. of well-capitalized to again the ratios all prior regulatory ratios five-year Noting

common ratio common level. of over X.XX% and total stress XX.X%. at And base And XX.X% Our Frank total well-capitalized XX% the level we to I'll is capital, the second, over with calculation with $XXX both excess credit Tier dividend. over capital include uncertainties excess the are today reiterate turn over and of intermediate-term Tier total forecasts, very past know is risk-based itself XX.X% in non-PPP billion; Namdar available and wrap horizon. with items and XX.X%. That capital $XX capital. I have excess key severe for we first, credit. and This is my to what basis results economic scenarios. the based capital risk-based at quarter The net allowance bank up ratio one increased of floor, forecast stands lastly want on the $XXX and position just one ratio was constantly to the near with we significant to excess excess our strong now in-house of capital comfortable remarks the again We I our ratio with over in million risk-based XX.X% call is which over is of in liquidity The our our ratio which excess capital loans; that, XX.X% loss the significant prepared our of liquidity our as our capital the discuss level million for given

and to Ron along. earnings to who referring be you, want presentation Thank will those page I also follow for from certain our numbers

quarter, a with the impacted we communities. as quick that First, this have update engaged have West Coast past the all on actively been wildfires impacted

aware covered a lost. of limited or Regarding residential thankfully were by our commercial very were that damaged properties And of customers, we were number properties service are no insurance all and impacted.

we did all in associates the providing ourselves collaboratively presentation. needed mentioned community where Slide store safe. Oregon that lose services of of a are As along that Phoenix extremely with grants our XX with essential are on community Most our working banking we're importantly grateful company and

highlights. on credit to quality Now

balances X.X% have We that of Total loan call. on which on updated slide are book as information our the on deferral of quarter's decline a XX X.X% October X. deferment is the last we currently loan from reported represent

properties are within information Hospitality of highlighted to levels and Applicable are deferral portfolios characteristics no far. we have million We Occupancy deferrals deferment. well. come pleased have $XXX experienced XX-ish our five that exposure; closely. to for The deferrals second with just have a total X.X% relevant $X.X continue oil and cure restaurants essentially extended segments. of Overall billion and XX% the in that X.X% one round very finally specific their segments been percent or the total thus rate off a are hospitality and watching and of show in by limited in remains XX% X.X%; gaming portfolio. have we COVID-XX. X.X%; nine area of extended specific air service at impacted portfolio basis commercial than and reporting and we perform On less range other gas portfolio; FinPac estate. with segment we an that following these estate On deferral real are commercial, consumer highlighted: X.X% currently at residential and eight our again Slide are X% totals and at in stay is been in at X.X% X.X% in transportation X.X% also real a

criteria low to stated we with borrowers depicts underwriting The have confident and area. we each disciplined with. XX of Slide loan book Slide very and are in overall major select and portfolio, our I XX our strong credit nature reflects quality in this history underwriting have sponsorship conservative established practices. for previously, geographic is our remains loan its As statistics. diversification leverage portfolio granular

to two ratio to our basis increased to specifically, annualized X.XX%. charge-off Within decreased to our And X.XX%. five the historical annualized and to assets over basis total our assets at call charge-off our Cort. points now was portfolio net average range turn percentage percentage points loans within nonperforming Our FinPac leases X.XX%. I will back

so Frank comments. much for Ron Thanks Okay. and your

now take We questions. will your

Instructions] from comes [Operator Bohlen. line the question Your Jackie first of

Your line is open.

your morning good the clarification you quarter quick of I'll something by hop Gen annualized mentioned a 'XX. with X.X, X% Hi, XX% the growth expect? as slide big to year-end that Is growth that cumulative is everyone. question you theoretical. into Next Or more this number? an Starting news then But and on that

space a C&I cumulative the in That's number over the is Jackie, Nixon. of next growth Tory this couple years.

you those? came assuming on unique between how now environment you a one completely determined up you're year-end just operating have that? right you how time we now, in time, I'm right XXXX? growth now. Understanding it's the than when by that characterize that curious And and Okay. would that point the very different with period that a But in

Yes.

this Tory, So I think again. -- is

are I in things of think to couple think a answering there about that.

the certainly, organized strategy all investments and improvement, more reduction, in But by of very business especially a expense Next the unknown process real And I continuous middle industry. created we're we people into growth geography middle feel the institution. unique take I is that an years, somewhat to a very a Gen help robust an And, X.X of the of grow plan leverage banking. technology, into in and over and disruption that the First of advantage the the is the around but the really we've momentum in by well business executing in to market it that market mentioned, in is And continue that to we environment in that we positioned trajectory to the space, of us think last as mean, our build still to and Cort as markets some pandemic. stick. disruption strategic we're have continue across business built certainly and some pandemic couple in is, element hockey share well certainly, has market as from on momentum small have segments. community

with Okay, then okay. how you with into balance have? Tory. play growth are also, And Thanks, just what adoption broadly, that the how then, does had customers assuming sticking revenue the theme, the some last pretty associated you I'm Gen revenue-producing products into new sheet those, of you revenue had of time, some that version than about of understand tangible different you numbers thinking plans with Next X.X? the some first I but Gen. Next And

of thinking particular you're how revenue about with curious plan? just this I'm so, And

Yes.

balances, revenue been Ron working let grow that a have same talk grow an grow the as we we for market incomes, balances, customers, grow can a to this year. on loan share, certainly side, all bit I grow things net So, see new fee little DDA core the on but opportunity non-interest-bearing

I where accelerated in years. is right I of in next think lot because can I now couple unique very in in to with, that prudent we feel the think we're a think, position of And accomplish opportunity what grow that -- the that of I optimistic expense us a company. will very an the about marketplace management, give disruption revenue and

Hey, Jackie, Cort.

market And just good economic we with will through all X.X. an it's way economy. would did Gen a in and the we agree little a you it's good your share. have on. all that And in some a something grow and different it's And I on And throw appreciate sheet It's we -- than little its this P&L, I people. that type feel of little that through we we it of quality just into me to harder different. our that uncertain candor, environment balance was think Next just XXXX prior works guidance the that today Let we call, question. give until guys out. We efforts attract rolled

I and company. as grow will assure your appreciate we this you, So question I we've exhibited,

the Okay. mean, No, I environment. I fully understand

Sorry, cut off. just Tory, you I

okay. that's No,

one for seen commercial and add in treasury to we business on a at is, example, look as last Just our space. and thing management banking one We've commercial activity to card V-shaped recovery just that in the fee-based corporate us. small

so of companies it's the in we've and And the of two bank, of of some sign their September, we're we that service bank into of of history just some have both products. brought usage that had the in best And the product a for activity months in providing. and more the those kind the robust

Okay. overlaid on revenue into improvements were efficiency any there And the assumptions six? slide

Ron, not. just on levels and at expense were This that No, we're on would Good were the Jackie. have basically impact that is what the looking focused there We efficiency morning. ratio.

one Do occurred Okay. dollar behind just have a the sale number quarter? store one. in then, last the you that three Perfect. And A income.

deposit again, about the Dollar $X third in of $XXX quarter. was non-interest in income, was And income. million other under outflow yes. It million just that

income related it have another one was any up Okay. Do four quarter. stores. And to I this coming that? know you you anticipate I believe

good a premium. A bit similar similar under, number, maybe but

step Okay. Good. Thank back. you. I’ll

Thanks. Yes.

comes question the Your your open. Young. of from line Sir, is Michael line next

have on the with picture, that going that Or should question. the is the of But some just in wanted mortgage did important the to upper-XXs front years? taking you're here of ratio mid-XXs are really I of challenging thinking story. the for I XX% number that? behind are from environment lower how press on operating necessarily efficiency to above end in elements to the kind ratio. focus Thanks scenes a you for a some big kind a in don't around Is and And big the business. Hey. color. to need kind kind really them revenue achieve want that not about all this that potentially understand of comment on think of out reinvestment tied this, of I below I to efficiency there strategic mentioned Cort, we appreciate

one, Gen, the part I going the yeah, we a we I announcement think to that were as made operate Michael, So Next company mean, sub-XX. of have

that. to you so all doing to intent your wanted question. we And appreciate on our I just recommit

it infrastructure to this me they need Let big size. efficiency ratio for got in opportunities investment across My in Wells couple with data, of we're deck the gives to I that in mentioned question that in puts like basic technology some we but team commercial X% sales people, less with takes a is, where game the the last opportunity which wanted a my get on what to use as We're chunk buy mortgage three feel a you're more Tory an we is ahead the of which different customers. there. of today, obviously wind of to take it take have at I Ron they reinvestment X% quarters, the We've remarks reduction people our technology, just made have, at One Fargo we level steps. us digital basis and you lot think. expense investments our digitize of and going with mobile left in our bank And a to couple some some the need and and to bet banking. attract mean, and stack. data we our announced is mortgage we to a we've over When all next primarily well technology three mobilize get is and years, the will for it activity. to with opening and significant where normalized look tools architecture over mentioned any a of

probably I'm answering exactly question. your not So

the do it to highly We are as reinvestment, also operate continue understand we manner, can. will company our take efficient we making continue our grow to most some we but in only on We sure this keen people. technology, not

So hopefully your question. I'm answering

that's that on pretty And get No more helpful. are related of record maybe Yeah. trajectory. little a into bit just to year, elevated. the kind this expense mortgage had year so a to We've specifics expenses Ron, blowout

we've sort X.X% expense assume then, Gen which generally So going ratio I mortgage will inflation. guess forward? looks expenses X.X, offset at like shift of the same that all? should got should that it kind we tailwinds on gearing Or of And Next of

not winter to in it couple basis But might going down through similar. drop-off Yeah. at is It saw QXs. assuming QX, level the I range. but you're expect of to of to not you're quite maybe be in quarters, stay the but you a points, the it and going strong QXs though see prior

to I more expect year. run So I think the on next there's mortgage elevated room And level going to said, continues. I on some like

fine should maybe it, thinking point run of about don't just expenses is year. -- to the about, in starting of a for we next Is we there year I year but think kind of throughout a mean a year terms there or as be too rate? next the as level want on put that any either I

we X.X take QX home of the that adjust we're Gen being contributor think lending, a higher it's least look $X at you at lending recognizing And But on large forecast, stay into pre-Next on billion level. now, can robust pretty a home quarter. I your at level based of volume for Well, that. to going that going

So proxy good start of. this probably a pretty off to working is

robust or next be teams availability to I spot do And it, Okay. hire, ahead? a you you scale out in mentioned what just the hires terms product about perspective. a see from follow-up just like over maybe could sweet that opportunity guys I the talk a a Cort It Maybe individuals you if mean, or opportunity are there. then, potential guess whether lender year? you size in of seems to

to Mike, let me Tory. bump that over

a be person, answer better to he'd think I it.

Yeah Mike. sure,

opportunistic. is So, what we we of very are have kind we positioned, -- always this how

into basis. a company. for talent, that have think I bring to have to regular -- we on fairly So And done continued the exceptional a look we

few in just As particular the minutes just on I marketplace mentioned, the disruption Coast, us. a West providing the in for opportunity ago just it's

that very the we bring So into We the continue bring that look it the we will bank. folks talent, to to accretive organization. to are feel continue that for

a we've house, the side think they those to point of market move will provide the that good allows to the as out. we the middle think institution us I certainly put in talked a to that in about company. lot and to company a bring different compete And to the Cort's opportunity to lot And of I day bankers want before follow. And into into to companies' bank continue tend bankers. solid day us with people infrastructure can

I credit wanted to in. Frank's Tory done has and mean we a access a and talked a emphasis And the a guys job alternative large has add we've it you want Ron the institution and experience with for that and who's brought can that have a great looking I banker are we me operate great years, the for at management, experience. size a yadi-yadi-yada. on -- of about And they level Tory They institution. to Tory to customer for this different thing.

good the never So people, we disruption geography, And talent, are invest there's certain problem always in the or a in benefactor when bank bigger of we market. to we've decide had in when we a certain attracting want space.

great. Okay

Now will step back. I

comes Your question from next Steven Alexopoulos.

Hi everybody.

Hey Steve.

would years. you growth. seems the that materially question pandemic? Next X.X? rate up doing been follow XX% was the expected without Jackie's X% maybe you've start have on of And that -- think before over about what Tory before So Is growth the Gen like than two different responded It to sort to least at cumulative I

this -- Tory I again. Well is

to in where really next in. look months economy. environment six can and at still the we not really, I the robust six see past of in think months the it's environment And a it's that recognize kind the important been if what we you have we're

-- in credit rate there's I utilization. look of borrowers down. were our I year-over-year lending down is if relatively So a line mean commercial at utilization for of our flat, not terms X%

an somewhat term. is very growth the in the for significant real getting near So unknown company in of C&I

XX% that definitely to So we X% hit can growth. we the feel

some the on economy based together. next be that And will plan what that's -- put six how why the months. and But we -- of in X-year rebounds a

it's So stretch share -- think banking I the I it's good full do to right company continue way market think organization. add relationships will it into a plan to it the the grow and

line? to the to hit then on Okay. you bottom expense expect of Is That's that ultimate the $XX helpful. expect million do you a what saves that? to Or And of portion reinvest million. $XX

expect hitting last of line And that what over in will will years. terms reinvestment the the bottom I for consistent be Ron. be done year we've full of it couple with the XXXX.

reduction of what large those But categories of in that the to be out a in run, So I called would expect reinvestment. chunk for not targeting that's we're XXXX.

Okay.

just the a was on that's up guess I question. if bit the I So last following case and little

quarter. efficiency this So is the ratio XX%

X doesn't you're going add committing X.X you're missing? XX. that, us to but seem telling under staying it You're I off take to to up. to am Like points What

do X.XX% next be Well billion lending of I say home think to quarter it'd over going three hard-pressed a years the we're volume to every margin. $X at

in efficiency second So into some all XXXX if half equal normalize that starts to see ratio. else could being of maybe the 'XX you lift

on be interest think when challenged going is bank income. Additionally obviously every interest NIM net and income to comes it net to I

at in shot year. effects holding PPP inclusive good a a relatively got we've think I given that year the of flat over next

isolation question look that but might of it's from different now So had. account, QX probably it into you the two biggest for trying expecting probably that bit to a home mover in take lending all years

Okay.

quickly $X.X we interest points of interest-bearing -- right? There's on that real They're costs. room our bit Steve that to So interest-bearing close CDs quite basis or -- a like deposit we've significant well. side like were run XX still our as within a net income on room of down deposits still X.X% billion maturity are to on this of funds to deposits cost. cost on bps And further XX the got further of quarter

at to close this do point? a you NIM bottom you're think So on

yes. reprice that. but Absent I wildcard the all think ability be lower fluctuations that being out yes, sheet are would with year our equal significant to volume we to else balance close in

finally then tank through put about think expense growth gas initiatives XXXX, a the preprovision But in at help. and trying is punch this we Okay. least the so to drive to And if there for will total headwind maybe mortgage banking pretax enough next together year?

of think quarters half to roughly X.X. XXXX realm mortgage as over that the And the start Gen first we next of have the within of I well the couple into possibility you and half I in Again of expect we'll especially XXXX. again think implementing definitely it's surprise as Next upside. we may So

questions. taking Okay. all Thanks for my

you. Thank bet. You

Rabatin. comes question next from Your Brett

good morning everyone. Hey

Good morning Brett.

just pretty still comments around I it about you've being made to a And talk second. robust. wanted mortgage for several Ron

so do go decline. does years. doesn't quarters? the sale environment gain as you lower prior in margins assume What What are get as sale I to margin you had the swings levels And the on next that we the maybe it few on back gain -- into assuming

from low range. standpoint margin sale that mid-X% think usually a on in our to gain I long-term is

look I the think be pipeline you've above significant I time. quarters. it we're But X.XX% going and couple over the when on got you north a see mean we constrained to of this X, going years the maybe opportunities of to over gain of X% will sale think some the elevated going probably that quarter, but to to next to to over of capacity next not you're margins quarters. X.X% had the historical be to industry just X out think X, given But there's I assume be reversion couple

fourth to then that the have quarter of about Okay. you was the and thinking environment. thinking about just the the wanted you're that thing ask around in going made the comments credits to some reserve I and about the other address And just to

here the from need it meaningful with to current to Assuming really baseline we seem economic perspective, doesn't to like you're of anything kind an rate going stay provision. run add

new provisioning don't color levels thinking just guys hoping about how to So will thinking maybe But production some the be know you to around are negative. and was I I about relative that reserves? provisioning get

Good surge the again for. that in charge-offs but have Again on reserved side, QX, will Yes. fully FinPac in we question.

economic upon So CECL, the forecast. be on going dependent it's to

more have. stay with we're low a on need on going It's me, either I see forecast forecast. I'll to where going the can intelligently to able reserves So a to as we're we you provision realize gut about couple event we say quarters just next kicking but feel in my start industry relatively credit off to and of or quarters. don't when at hard hold lot to talk more be we're the tells it, the going for to an Again January you're economic changing. as good But take December keep given much couple very to

one last I one, then Okay. could. if maybe And

the could dividend dividend? about and relation in regulators. you the Is anything with talked share conversations briefly working You to the with there them about

driven we at now obviously, with recurring with actual the great. been process regulators look and I work by very the It's closely mean goodwill earnings and negative forecasts retained quarterly impairment. results the

of So we the look forward within dividend our couple next to weeks. next announcing here

color. Great. for Okay. the Thanks

you. thank Brett,

Your the comes next question of from line Jared Shaw.

Hi, good afternoon. morning. Good

Jared. Hi,

XX% and back Just next-Gen the on efficiency X.X circling the target. again

full So all XX% look right if I Cort, So when are that as 'XX below of stay that at XXXX. be being XX%. year the to you at this able the efficiency last you we XX% implemented? consensus look think benefit you'll now think ratios at hits saying is you that

while So could that in this only XX%? of you you 'XX that stay still benefit get below XX% think

that's Yes, plan. the

we're manage broader excess to the your want can additional That -- I management Okay. be capital just the on circling you on do you capital look that think you there what guess what XXXX, at great. then dividends. tools here again And is some high is Or capital -- more down this with sit have to on until excess impacts? at that employed levels as you capital? of clarity of plan point economic more said

It focus and opportunities elsewhere. there's around growth Yes. changing has our more the strategy historically last fast pretty been organic again continue they've optionality will Definitely, into supporting looking But how lot of be future. overall say gives I'd the on But couple of us that the which just to forecasts definitely that to amazing focus. a is quarters. subject which on our changed over using front. opportunities

some at That point could year? include potentially evaluating a next buyback in the

again and our you've outsized just But executing on Cort Tory It our It could could it could talk also be. growth as would also about that regulators. recognizing with just be heard, require us strategy. that also discussing

At excess really thinking with that and what like looking should be of for then want near-term. looking higher XXXX? to liquidity guess Or the year-end And point with tying for can Is the start sort run at I I Okay. that that? that more we really some you levels 'XX guess that hearing deployed? that at

a reprice also sheet the of optionality with the gives that continue to balance think I to us of lot side lower. it right on

of non-PPP So for that kind governor it demand will watch we when lending. be the comes to new

to for So the we've no on got sheet line change. similar move as cash winds specific capital on us just time that balance to optionality reducing

fires. everybody Great. wishes Thanks. best the Okay. glad to that to safe. that. am by And I Thanks hear everybody impacted for

Thank you. Hi, Corey.

next we there, question. still You get the

Yeah.

Jeff, is question line of open. from your the next Your line Rulis. comes Jeff

Good Okay. pause you. Thank there.

you're is growing level. growth normalized expense it to as XXXX, at you're the so to expense think look versus could On at a rate growth trying rest capture Do for rate? we growth if if X% that rationalized saves a the about If just just feather negate what -- I of in call $XX-something that normalized -- to X%, does So year-over-year? that million the want flat like or that we XX% you match just of the cost the against saves. be you're just Or it platform?

home Hey, And activity is could Good lending on volume your which that and is This lower. could morning. assumption higher assuming Jeff. be again, whatever Ron. be

X% be on. layering to core kind in see not lift X% before that expenses on to this goal is and Our to going a of

happens Again, reduction. all a home what be would equal here ex lending. goal being the So with else

Okay.

charge-off have future quarter surprises net no charge-off to fourth Helpful. just know in quarter And that reserve Ron, XX.X% charge-offs the assumed Okay. helpful if what this of QX quarter? this what the these was obviously And I peppered net levels there? the think lot that? net in but you level heavy makeup also makeup of mentioned FinPac with been that's the too. Sounded a was ever The reserve,

$X similar FinPac. at Frank was roughly it's Yes, the bank. of million quarter about this I of FinPac And Jeff, $XX was about makeup quarters the million mean, Namdar. it to previous primarily that. was

So it was levels we've pretty seen typical that historically.

is And Yes. Ron. Jeff, this

XX% And we to I also billion reiterate our with have in ACL. group for fully reserved elevated about carrying leasing surge want to in So roughly leases the tranche the that $X.X just we'll that book specific yield. talked

So, good profitability. still pretty underlying

Appreciate Okay. Thank it. you.

Jeff, thanks.

Your question Clark. the next comes line from of Matthew

Hey, good morning.

morning, Good Matt.

Investment on question to at million slide had $XX Savings just in in on X% Umpqua improvement million about a the ratio I particularly to $XX the efficiency X improvement. X% that the along the

I $XX point about end XX million $XX just think at revenue a that if basis improvement million strip of million $XX like the the that's generated you out business high annually. expenses the efficiency the of And in ratio.

that get just So I wanted assuming to sense better what a underlying for you're improvement? for

sorry, is that works Matt, of XXs. X%. roughly a out somewhere XXX% XX to on in this Ron. But in you bit out efficiency had basis that's is to Yes, that isolation this business in a above of terms Jeff, just revenue. -- it expenses close a When the X% strip so XX or to UI to ratio consolidated

Okay.

Okay.

on amount of the gain but then branches And call mentioned have quarter? probably Sounds I on of the it the the good. you may missed it, sale and this three

Just million other under $X in income. non-interest

Okay. Thank you.

Matt, thanks.

[ph]. comes next the line from Carleton your Your is Andrew of line question Sir, open.

good Hey, morning.

morning. Good

Hey.

on So the X slide is X.X helpful. Next extremely Gen

any onetime for just that. to of type associated costs are these be with are that going initiatives? any I'm thanks there of So wondering,

to a are buyouts, This the look on next quarters couple could front at et is likely facility related with Ron, side Andrew. Yes million going that our there dollars most cetera. as be of planning we two the to lease over

Okay. Thank you.

over of branch the kind guys done years the excellent past few You an have count. rationalizing job

I'm these guys branches a from deposit these of risk? And store assuming attrition you XX it's XX or branches. come. you got are You've to more wondering potential of think rid consolidations to closing getting any do kind

been We process six really last closed phase, or nine in the the When Andy. active months the Cort, to ago. or consolidated it's in because Hey, were a any we they're year in haven't were sales. active so we

to all cases up. five were cases rates took Our go consolidated so did doing and much perspective when we two balances away some stores, we you attrition kind had when We up some one. the look of in But at well how historical the were much, deposit actually we when of great. made this. historical miles saw attrition better making excess We rates using going guidepost in not we're than you've were And this in attrition that or a applied we is forecasting. manage rate that any

ongoing Tory. an a this thing And connect on can certainly I opportunity prior means basis. this we to leverage add is kind and that. just into with thereafter Andrew, Hi. customers to one closely where an is Go-To as of

that well element that think I that consolidate and to our that we really serves feel the as the digital of continue case. us be stores will certainly

helpful Okay. All That's asked very and other color. my have questions answer.

So thanks for taking question. my

Thank Okay. you.

Thanks.

Instructions] [Operator

have Okay. more Corey any questions. looks we it like don't

So I Holdings their to want the their call. and on thank conclude will interest call for Umpqua everyone the today. Goodbye. attendance in This

Ladies conference for you Thank call. your this does and participation. gentlemen, conclude today's

disconnect. You may now